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    HRM637 Dis3

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    155- Salsabila Gading
    The document discusses the differences between external competitiveness and internal alignment in compensation strategies. External competitiveness refers to how an organization's pay compares to other companies, while internal alignment looks at pay differences between roles within the same organization. Both concepts are important but consider different factors - external competitiveness is shaped by the labor market, product market, and the organization itself, while internal alignment reflects an organization's vision and mission. The strategies can be incorporated if they ensure efficiency, fairness, and compliance.

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    HRM637 Dis3

    Uploaded by

    155- Salsabila Gading
    19 views2 pages
    The document discusses the differences between external competitiveness and internal alignment in compensation strategies. External competitiveness refers to how an organization's pay compares to other companies, while internal alignment looks at pay differences between roles within the same organization. Both concepts are important but consider different factors - external competitiveness is shaped by the labor market, product market, and the organization itself, while internal alignment reflects an organization's vision and mission. The strategies can be incorporated if they ensure efficiency, fairness, and compliance.

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    HRM637_Dis3.docx

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    The document discusses the differences between external competitiveness and internal alignment in compensation strategies. External competitiveness refers to how an organization's pay compares to other companies, while internal alignment looks at pay differences between roles within the same organization. Both concepts are important but consider different factors - external competitiveness is shaped by the labor market, product market, and the organization itself, while internal alignment reflects an organization's vision and mission. The strategies can be incorporated if they ensure efficiency, fairness, and compliance.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    19 views2 pages

    HRM637 Dis3

    Uploaded by

    155- Salsabila Gading
    The document discusses the differences between external competitiveness and internal alignment in compensation strategies. External competitiveness refers to how an organization's pay compares to other companies, while internal alignment looks at pay differences between roles within the same organization. Both concepts are important but consider different factors - external competitiveness is shaped by the labor market, product market, and the organization itself, while internal alignment reflects an organization's vision and mission. The strategies can be incorporated if they ensure efficiency, fairness, and compliance.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 2

    1.

    Distinguish policies on external competitiveness from policies on internal


    alignment. Is it possible to incorporate both in a strategy? What factors shape an
    organization’s external competitiveness?
    According to Milkovich, Newman and Gerhart the core different between the two
    concepts is that "external competitiveness" is one organization's compensation
    comparing to other organizations in the same industry, on the other hand, "internal
    alignment" is one job's compensation comparing to other similar positions within the
    same organization (2014). There are many effective factors on the external
    competitiveness such as economic factors, government policies and regulations,
    external stakeholders, and organization's cultures. Furthermore, internal alignment
    factors are divided into external factors, organizational factors and internal and external
    factors combine (Milkovich, Newman & Gerhart, 2014).
    Although the two concepts are different, they share three fundamental approaches
    which are efficiency, fairness, and compliance.Efficiency is the first factor, it encourages
    individuals to stay within the organization and invest in their and its growth, which
    increasing experience and training. The second, factor is fairness through the pay
    structure of different positions and jobs. Last is being compliance which means both
    compensations, "internal alignment" and "external competitiveness", must be compiled
    in terms of policy, rules, acts, and regulations (Miller, 2011). Thus, it is it possible to
    incorporate both in one strategy, yet it would be ideal to incorporate both of them in a
    strategy.
    In sum, both "internal alignment" and "external competitiveness" are key
    compensation which includes all direct or indirect payments to employees. Meanwhile,
    external competitiveness directly affects efficiency and fairness within an industry,
    internal alignment reflects the organization's internal drivers including its vision and
    mission (Costa-Campi & Viladecans-Marsal,1999).The factors which shape an
    organization’s external competitiveness could be summarized in three points; Labor
    Market, Product Market, and Organization (Baraniuk, 2017). The value of the external
    competitiveness is that the tool to determining pay structure to focus and to maintain
    competitive with another organization.

    Reference
    Baraniuk, K. (2017). Analysis and structuring of external and internal factors on
    influence on competitiveness of enterprise. Food Industry Economics, 9(1), 30-37.
    Costa-Campi, M. T., & Viladecans-Marsal, E. (1999). The district effect and the
    competitiveness of manufacturing companies in local productive system. Urban Studies,
    36 (12), 2085-2098.
    Milkovich, G., Newman, J., & Gerhart, B. (2014). Compensation. New York, NY:
    McGraw-Hill.

    This study source was downloaded by 100000837906995 from CourseHero.com on 11-15-2023 07:45:28 GMT -06:00

    https://www.coursehero.com/file/67666777/HRM637-Dis3docx/
    Miller, S. (2011). Counter misconceptions about pay. Society of Human Resource
    Management. https://www.shrm.org/hr-today/news/hr-
    news/pages/misperceptionsaboutpay.aspx

    This study source was downloaded by 100000837906995 from CourseHero.com on 11-15-2023 07:45:28 GMT -06:00

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